1. TSLA Intraday Trend Trade
after Reversal off Double
Bottom
Deborah Knighton
1/14/2014
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No relevant positions
Please note: Hypothetical computer simulated performance results are believed to be accurately presented. However, they are
not guaranteed as to accuracy or completeness and are subject to change without any notice. Hypothetical or simulated
performance results have certain inherent limitations. Unlike an actual performance record, simulated results do not
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over compensated for the impact, if any, of certain market factors such as liquidity, slippage and commissions.
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3. Big Picture
• After making an all time high on December 31st,
the SPY consolidated for seven days then
reversed lower yesterday moving it out of its
consolidation box.
• Today the overseas markets were mixed in Asia
and were trading slightly lower in Europe prior to
the open.
• The futures were up this morning on better than
expected retail sales and the SPY gapped up and
continued to trend higher the rest of the day.
4. The Big Picture
SPY reversed below the
bottom of the box
yesterday on above
average volume
5. Trade Strategy
• Trade a reversal on a longer time frame
• Wait for reversal confirmation to enter
• Get lucky! (Positive news came out after
already in the trade)
• Trade the intraday uptrend
6. Intraday Fundamentals
• TSLA trades with a Beta of 1.2, average volume of 10.6
million shares, and has an ATR of 7.4.
• TSLA has a short interest of 50.7%.
• TSLA is ranked by IBD as #1 in the automotive sector
and has a grading of 72 78 97 C D D+.
• There were recall rumors circulating in the morning
that were later clarified that is was for software
updates, nothing to do with the fires.
• A headline that Tesla had 6900 car deliveries in Q4
caused the shares to pop.
• Elon Musk’s appearance on CNBC later helped propel
TSLA shares even higher throughout the day.
9. Intraday Technicals
After the news pop TSLA
retraced back to VWAP where
it caught a bounce, then
trended up the rest of the day
News Pop
Retrace and
bounce off VWAP
Double Bottom
10. Reading the Tape
• I was using options for these trades so I used the
tape to get a general idea for where buyers were
supporting the bid and where sellers were
stepping in whenever TSLA was near a key
support or resistance level.
• I noticed that TSLA put in a double bottom after
selling off this morning, then traded up to the flat
line where it consolidated just above VWAP.
• Today was pretty easy to read the tape due to the
volatility and volume.
11. Trade Management
6
1.
2.
3.
4.
5.
6.
Bought 1 Call for 4.70 at 11:15
Bought 1 Call for 5.22 at 11:21
Sold 1 Call for 4.91 at 11:24
Bought 1 Call for 4.85 at 11:27
Sold 1 Call for 8.40 at 11:44
Sold 1 Call for 11.18 at 11:48
5
2
1
3
4
First Position using the Jan 24’14 139 Calls
12. Trade Management
2
1.
2.
Bought 1 Call for 4.55 at 12:12
Sold 1 Call for 5.18 at 12:19
Second Position using the Jan 17’14 142 Calls
1
14. Trade Management
October pivot low
1.
2.
Bought 1 Call for 4.63 at 2:30
Sold 1 Call for 5.05 at 3:00
1
Missed this move
After closing third position, I took
some tie to chill, eat lunch, and
watch a Playbook presentation
until about 2:00
Fourth Position using the Jan 17’14 155 Calls
2
16. Trade Management
3 points
October pivot low
2 points
4 points
9.5 points
1.5 points
Summary of Intraday Involvement in Calls
20 points total
captured
17. Trade Review
• I was very happy with my entries and exits today trading TSLA.
• I struggled with whether the trades were going to be intraday only
or swing. I am content with my final decision to go flat TSLA at the
end of the day.
• After giving up all my profits yesterday on my swing positions, today
I was completly okay with missing out on some of the moves.
There are plenty of trades out there and I am much less stressed
when I am in the trade only when it is going the right way.
• I used two calls in the first position to scale in and out. Later I only
used one call as the trades were basically momentum scalp trades.
• These trades are scalable. When my portfolio increases I can put
more money at risk to enter the trades with more calls and add to
the positions.
